Nematodes are the dominant and perhaps best studied soil animals of the Antarctic Dry Valleys, yet the genetic mechanisms by which these nematodes can survive multiple environmental stresses, such as freezing and desiccation, are poorly known. To reveal the molecular genetic mechanisms of anhydrobiotic survival, we investigated gene expression in a desiccation and freeze tolerant Antarctic nematode, Plectus murrayi. Using molecular and bioinformatics approaches, we provide the first insight into a desiccation-induced transcriptome, and regulation of these transcripts during different stages of stress under ecologically relevant conditions. Transcription profiling indicates that the viability of stressed nematodes encompasses differential expression of a suite of genes and constitutive expression of others. Temporal analyses of gene expression show that acclimation to mild stress promotes survival of harsher stresses. We further show that adaptations to desiccation stress promote enhanced cold tolerance, and that slow dehydration can enhance the freeze tolerance response. Expression profiling of transcripts of P. murrayi is an important step in understanding the evolution of genome level responses of this nematode to different environmental stresses. Analyses performed in our study set the foundation for more detailed functional and genome level investigation of genes involved in stress tolerance in nematodes. As anhydrobiosis and tolerance to freezing is broadly distributed among Antarctic taxa, we anticipate that our findings could be extended to facilitate studies on the evolution of these traits across multiple metazoan taxa, particularly among the Ecdysozoa.